Mandy Barrett of insurance brokerage and risk advisors, Aon South Africa, said that the damage that takes place across the country showcases the vulnerability of South Africa when it comes to the changing weather patterns and climate change conditions.
Barrett explained that Southern Africa has experienced disasters that have caused a major loss to businesses and homeowners in the past six years. One disaster worth noting is the recent cyclone Idai which happened in March 2019, which left nearly 1 100 people killed in Mozambique, Zimbabwe, and Malawi.
According to her, under-insurance remains a fundamental problem for individuals and businesses and South Africans have witnessed a direct result caused by great levels of under-insurance. She said that many people who live in complexes and secure estates live on the assumption that they are totally safe and that there is no need for insurance.
She gave a practical example: The Knysna fires and the thousands of people who lost their homes because of it. Some who had settled their bonds with their banks had failed to restore their buildings insurance in the wake of closing their bond accounts.
Barett said, “It was heart-wrenching to hear reports that some people affected by the Knysna fires were left severely compromised with either inadequate or no insurance cover at all. How do you recover from an outright loss of your home when you still owe money on it and have no insurance cover to replace the loss to return you to your former financial position? It points to the need to have a strong relationship with your insurance broker, to meet to review your needs at least every year, and to follow the sound advice given when it comes to insuring your most significant financial investment – your home and everything in it”.
Tony Webster of Aon South Africa explained, “Business interruption insurance is designed to compensate the business for the financial impact of the interruption or interference as a result of the insured suffering physical damage to the insured property or other key external events, for example damage at a key customer or a supplier’s depot, or own operations that prevents the normal business operations from continuing and generating revenue.”
Mandy concluded that the growing dangers presented by outrageous climate patterns demands that people and organisations assess their insurance needs in detail and get fair and expert advice to guarantee that the cover returns them on their feet. Insurance is regularly observed as a grudge buy and it is one of the reasons as to why numerous individuals fail to give the important consideration to what is basically a lifeline during an emergency.
Related article:
Idai, Kenneth and deadly flash floods in SA – Is #ClimateChange to blame?
